HONG KONG: China's yuan weakened slightly against the dollar on Monday even after the central bank set the official guidance rate slightly stronger against the greenback.
The yuan pulled further away from a 4-1/2-month high hit last week as the dollar stabilised after suffering its biggest one-day fall in more than three weeks on Friday, following a batch of economic data that led markets to temper expectations the Federal Reserve would soon raise interest rates.
The People's Bank of China set the midpoint rate at 6.1661 per dollar prior to market open, slightly stronger than Friday's fixing of 6.1681 per dollar. The spot rate is currently allowed to trade 2 percent above or below the midpoint.
The spot market opened at 6.1760 per dollar, up 0.06 percent from the previous close of 6.1798, and was changing hands at 6.1766 in late morning trades.
A recent trend of an appreciating renminbi coupled with steadily weaker midpoint fixings has brought the two rates to its narrowest level since early March as the PBOC seeks to align market expectations with the official guidance.
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